Managing the Sales Territory

Most Sales People make the mistake of starting in the middle.  They start with ‘action’

You’ve been given a sales territory. Now what? Go sell – Grow the territory!  Action.
First of all, let’s make sure we know what we have and what we’re doing.

Here are some of the initial pitfalls.

1) Some sales people simply take the new product line to their existing call pattern.
They collect lines and see how much product they can more through the channel they have already developed.             This strategy almost guarantees they will play musical lines, losing lines as quickly as they add them. It is not a customer or manufacturer friendly strategy.

2) Some sales organizations look for as much geography as they can get.
They hope to maximize commissions with items shipped into the territory - without having to sell and service. This won’t last long.

There is no evil intent here. All sales people really hope to grow the business.  It is how they make money. Some have never learned to be a Territory Manager. Here are some initial steps to help you maximize the geography you represent.

1) Clearly know your area of responsibility.
The Sales Territory boundaries should be clear. Better yet, assign zip codes so you can color it on a map. Free Zip Code references and boundaries, as well as maps are available here:  http://www.zip-codes.com  

2) Analyze the territory.
- What is the population base?
- What are the income levels?
- What is the ethnic and age breakdown?
- What are the major population centers?
- Who are the major employers that might affect your sales?

Links to Analyze Your Territory
Population Trends by State and Metropolitan Area http://proximityone.com/population_trends.htm 

Median Housing Values http://proximityone.com/acs0708mhv.htm

Educational Attainment http://proximityone.com/acs.htm

Employment, Wages by County, Metro & State http://proximityone.com/acs.htm 

Graying of America Population Trends 65+ http://proximityone.com/acs.htm 

Personal Income Rankings by Metropolitan Area http://proximityone.com/msapi05.htm 

3) The Most Valuable Geography
The Top 40 Metropolitan Areas have over half of the U.S. population.
Half the population in just 40 cities. If you have one or more of those cities in your territory, be sure you are providing focused coverage. It is the biggest opportunity you have.

Your goal is to be busy and profitable locally. The less time you spend traveling, the more time you spend selling.       The more time you spend visiting key accounts.  Your service is better. Your relationships grow stronger.

So, what are the major population centers in your territory?  Are you close enough to provide appropriate service?
Traveling a great distance to serve a city is delusional.  You won’t provide the service or consistency a local sales person can.  And you’ll take away from your customers closer at hand.

Does that mean you shouldn’t travel? Not at all. Just be sure you focus your energies accordingly.
If you have a major metropolitan area, invest your time there.

For a ranking of the top metropolitan areas, visit Wikipedia.org at
http://en.wikipedia.org/wiki/List_of_United_States_cities_by_population

4) Effective Channel Marketing
Now that you know your geography, what is the potential?
Channel marketing is simply identifying like customers that are prospects for your product. You may choose to include a new channel in your call pattern, or you may find it a distraction. In either case, you should identify the potential of all channels so you can focus your time on the best opportunities.

Channel Samples
Sporting Goods – Ski Shops – Running Shops – Climbing Shops – Outdoor Retail – Hunting & Fishing – Bicycle Shops – General Merchandisers

Drug Stores – Grocers – Convenience Stores - Supermarkets – General Merchandisers

Hospitals – Surgery Centers – Acute Care facilities – Surgeon Clinics – Physical Therapists – O&P - DME.

Whatever product you carry, there are multiple distribution channels you can choose.
First, make a list of the various channels you could consider.

Then guide your efforts to maximize your sales by identifying all the prospects in each channel. This is YOUR inventory. Now you know who all you can sell.  You’ll be amazed at how much potential this exercise reveals. With this inventory you can decide which channels offer the best potential.

5) Competitor Analysis
In your training, you’ve already identified competitive products. If you are well trained, you’ve seen and used the products. Now apply that training to your territory.

Which competitor is strongest in your territory?  Which competitive products do you see pop up the most?
Who is the sales person? What do you know about them?  What are their strengths?
How long have they been selling in the area? Do you know their vulnerabilities?
You should know all of the sales people you sell against. The information will be valuable when you are in front of customers.

Is one competitor particularly weak in the market?  Can you erode their market share?  Have you identified their customers?

Sales Plan

This is easy, but important. It is very simple.  There are only three ways to grow your business.

#1 Grow your existing accounts
#2 Add new accounts
#3 Retrieve lost accounts

#1 Grow your existing accounts (Key Accounts)
You’ve already identified your Key Accounts (the top accounts in the territory according to the 80-/20 rule).

Key Accounts are the closest sales dollars in the territory. These accounts believe in you and your products. They are the most likely to give you a try.

Each of these key accounts should have a leverage sales plan specifying the next few products you intend to introduce over the next 90 days. Evaluate competitors still in the account. What products can you add to erode their position?   You should always know where you plan to take your most important customers. Otherwise, you’re just showing up.

#2 Add New Accounts (Target Accounts)
Ask most sales people if they have new prospects and they will readily say ‘yes’ - and show you a list of a hundred accounts. That’s a directory, not prospects.

Don’t sell everybody – sell somebody
Sales take time. You’ve got to introduce yourself, position yourself and your company. Establish a relationship with the account. Then earn your way in. You can’t effectively do that with very many accounts.

Be focused on the opportunity. Identify maybe three prospects that you’d like to earn over the next 90 days (depending of course on your own sales cycle). Invest some time to get to know the account. The competitors they use. The volumes they use. The prices they pay. Their satisfaction with the current product and rep – though this may come more from your market understanding than their comments.

Identify 3 accounts in a specific time period and focus on that opportunity.  Invest time. Track results. Earn the business.

When you earn the account, or strike out, move on. Add another new prospect with a set time period. Will these accounts all be decided within your time frame? Of course not. They will carry forward. But they will carry forward with the benefit of the knowledge and relationships you developed in that focused time period. They will be a more viable lead than just making initial calls on more accounts.

#3 Retrieve Lost Accounts
Oftentimes we lose accounts just from a lack of attention. Perhaps the prior sales rep didn’t visit. Maybe another rep just diverted the business. Maybe it changed for no real reason at all. You won’t know until you visit. When you are in the area, visiting your key accounts or target accounts, plan to stop by the lost accounts. You’ll be surprised at the percentage of businesses that return simply because you showed interest. Others will return when you listen to why they left, and correct the problem. Lost accounts are among some of the easiest business to garner.

All of these accounts should be listed in your CRM database where you’ll have an entire profile of the account and record of activity.

The Sales Management 90-Day Plan

The number one rule in selling is to have a plan.
Don’t wake up Monday morning with no appointments and just get in the car.

Too many sales associates manage their time by requirements placed on them.
“I have to deliver a product sample, so I’ll run up there first.” Pretty soon, the territory is managing them.
The plan is a way of organizing yourself to spend more time selling in the field.

The way to do this is build around the 90-day plan.

You know what you need to achieve to earn the level of income you want. You know the number of calls you need to make each day. How many prospects you’ll need to feed that kind of activity. You know who the prospects are and what you want to sell them in what period of time. You also have your personal standards in terms of calls and closings.
If not, see ‘Living on Commissions’  It is a great exercise for Sales people to assist in planning.

Break it down into a 90-day play. What you will accomplish this next quarter:
- Plans for your Key accounts (80/20 rule).
- A consistent presence with your Target accounts
- Emphasis on Focus Products offering higher commissions
- Full utilization of new product launches
- Maximizing seasonal opportunities
- Planning Trade Conference Attendance
- Providing alternatives to competitive shortcomings
- In-Service Training for newly placed products.
- Networking and Cold Calling

The 30-day Plan breaks the larger plan into tactics, or what you’ll do each week.
You know what you need to achieve during the quarter. The 30-Day plan determines the week and day you’ll do it.

Will you deviate from the plan? Of course. But at least you’ll know you deviated. It allows you to evaluate opportunities and spend your time for the best return. It also allows you to change priorities without losing track of them.

Customer Management Test

Let’s see how effective you are managing your customer’s buying process.
Think about your last three sales.

Who bought the product?

Who used the product (or witnessed its performance)?

Who was responsible for that department’s results (the management connection)?

How did those three (or more) people interact in the purchase decision?

How did the buying process work?

What access did you have to these people?
Did you meet them?
Did you talk to them?
Did you present to them?

The further away you sell from the user and the manager, the more price will matter.
The closer you are to these users, the less the nominal price difference will matter.

Remember, seldom is your price difference with a competitor more than about 10%.